Nirmal Bang has retained its Buy rating on small-cap healthcare company Zota Healthcare and set a target price of ₹1,679 per share, representing a potential upside of 48% from the current market price of ₹1,135. According to reports from ET Now, the brokerage has lowered its target price from ₹1,799 earlier to ₹1,679, while maintaining its positive outlook on the stock. The brokerage expects the company's revenue to grow at around 60% CAGR during FY26-FY28E, supported by expansion of the store network, improving operational performance and increasing scale across its network.
Zota Healthcare reported decent revenue growth during the June quarter, with consolidated revenue increasing 67.6% to ₹1,740 crore. As reported by ET Now, the company's operating performance remained under pressure during the quarter. The brokerage highlighted the performance of Zota Healthcare's Davaindia business as a key growth driver, with Davaindia's revenue increasing 89.6% to ₹1,430 crore during the quarter. For valuation, Nirmal Bang has used a 20x FY30E EV/EBITDA multiple to arrive at the target price of ₹1,679 per share.
The company added 264 new stores during the quarter, including 201 company-owned, company-operated (COCO) stores and 63 franchise-owned, franchise-operated (FOFO) stores. According to ET Now, following these additions, Davaindia's total store network increased to 2,825 stores. The increase in store network supported customer footfalls, with footfall increasing from around 3.5 crore to 6 crore, while gross merchandise value (GMV) increased from ₹900 crore to ₹1,600 crore during the period.
Zota Healthcare was trading at ₹1,135.00, down 106.30, or 8.56% from the previous close of ₹1,241.30 on NSE, as reported by ET Now. The stock's performance reflects market reaction to the quarterly results and analyst commentary. The current trading price of ₹1,135 represents the market's assessment of the company's growth prospects and operational challenges during the recent quarter.
